Bankruptcies and bank failures such as Silvergate, SVB and Signature Bank and the impact of digital money (Part 2)
The first part of this article last week discussed how bankruptcies are soaring globally, spurred by tightening monetary policy and significant bank failures. This widespread financial distress has highlighted growing global economic vulnerabilities and the bank failures of Silvergate, SVB and Signature have drawn attention to banks once again. The fragilities of fractional banking and relying on commercial banks to create ‘e’ (electronic) money have been exposed since depositors are able to remove money on-line at the click of a button. Between 2001 and 2023, 567 US banks have collapsed, and there are concerns regarding a further “186 banks at risk of failure.” Meanwhile, commercial real estate (CRE) remains a particular concern, especially for smaller banks with significant CRE loan exposure. The most recent bank in the US to go under is Republic First Bank (Philadelphia) and unfortunately banks in various other jurisdictions have suffered equally, such as Credit Suisse in 2023 and …
Keep reading with a 7-day free trial
Subscribe to Digital Bytes to keep reading this post and get 7 days of free access to the full post archives.